n'mnupulrdfi

contract w a s rejected. I t i s i n t h i s c o n t e x t reliance w a s placed o n clause 1 3 . 1 . 1 o f t h e

aforesaid Chapter b y t h e appellant. For ready reference t h e same i s q u o t e d h e r e u n d e r : - -

" T h e quantities n o t e d i n t h e schedule o f quantities a n d b i d s are a p p r o x i m a t e

a n d n o claims shall b e m a d e against t h e G o v t . f o r excess o r deficiency therein,
actual o r relative. Payment a t t h e rates agreed u p o n w i l l b e f o r completed w o r k
u n d e r each i t e m o f t h e schedule o f quantities a n d b i d s a n d w i l l cover materials,
supplies, labour, t o o l s machinery a n d all o t h e r expenditure incidental to t h o s e
i t e m s , unless otherwise specifically p r o v i d e d . "

1 2 . O t h e r clauses o f Chapter 1 3 deal w i t h reimbursement to contractor o n account o f

increase i n m i n i m u m wages o f labour, variance o f c o s t o f l i v i n g i n d e x , variance o f
material m e n t i o n e d i n Clause 9 . 7 . 1 o f part I etc. T h e q u e s t i o n , i s w h e t h e r i t w o u l d b e
applicable o n t h e facts o f t h i s case. I t i s also n o t disputed u n d e r t h i s contract a
contractor w a s b o u n d to render additional w o r k . I n t h i s regard i t i s significant to refer
to n o t e 5 7 a t p . 4 1 0 o f t h e b o o k " B u i l d i n g & Engineering Contract" b y Gajaria, w h i c h
has also been referred b y t h e A r b i t r a t o r , w h i c h i s q u o t e d h e r e u n d e r : - -

" 5 7 Extent o f Contractor's L i a b i l i t y f o r Execution o f Extra o r Additional

Quantities o r Rendered I t e m :

I n m a n y contracts, d u r i n g t h e progress o f t h e w o r k , as a r e s u l t o f
drastic change i n designs, d r a w i n g a n d specifications, t h e contractor i s
required to execute t h e tendered i t e m s f o r i n excess o f t h e tendered
quantities o n w h i c h invariably h i s tender i s based. S o m e t i m e s t h e
excess o r additional quantities o f s o m e o f t h e tendered i t e m s exceed b y
1 0 0 % to 5 0 0 % even m o r e . I n such cases a question often arises
w h e t h e r t h e contractor u n d e r t h e variation clauses i s liable to execute
t h e extra o r additional quantities o f t h e tendered i t e m s a t t h e tendered
rate to a n u n l i m i t e d extent. I t often happens t h a t a contractor, f o r
various reasons, quotes a n a b n o r m a l l y h o w rates f o r certain i t e m s t h e
quantities o f w h i c h a r e few o r h e m a y b e h a v i n g s o m e facilities to
execute t h a t i t e m s i n question a t comparatively l o w rates. A n o t h e r
aspect f o r consideration o f t h i s question w i l l b e t h a t t h e contractor
tendered h i s rates o n t h e basis o f t h e quantities m e n t i o n e d i n t h e
tender a n d also t h a t d r a w i n g s , designs a n d specifications a n d i f t h e
quantities o f a n y o f t h e tendered i t e m s increased drastically o r b e y o n d
a n y reasonable percentage, w i l l b e liable to execute t h e same b e y o n d
a n y reasonable l i m i t . S i m i l a r question w i l l arise w h e n there i s reduction
i n t h e tendered quantities o f t h e tendered i t e m o r i t e m s . I n such a
situation, t h e m o s t i m p o r t a n t factor to consider w i l l b e as to w h a t
w o u l d b e t h e reasonable variation i n t h e tendered quantities s o as to
b i n d t h e contractor to execute a t t h e tendered rate. I t has been
suggested b y D u n h a m i n h i s Treaties o n contract, specifications o f L a w
f o r Engineers, ( 1 9 5 8 ) E d i t i o n , a t p . 2 1 4 t h a t a change o f less t h a n 5 %
w i l l b e insufficient to constitute a j u s t c l a i m f o r a n extra w o r k . I t has
been f u r t h e r suggested t h a t t h e contract s h o u l d state t h e permissible
variation in the quantities and such a statement will avoid many
arguments.

1 3 . T h e above preposition has been stated o n t h e basis t h a t t h e o w n e r i s o b l i g e d to

p a y - - ( 1 ) w h e n t h e d a t e - b y t h e Engineer to t h e bidders a r e inaccurates, ( 2 ) w h e n t h e
extras develop because o f i m p r o p e r design a n d plans i n t h e f i r s t place, a n d ( 3 ) w h e n
 fl'mupulrdfi
t h e Engineer makes-serious change after a contract i s signed.

1 4 . I n s o m e awards g i v e n b y t h e Arbitrators i n t h e Central Public W o r k s D e p a r t m e n t o f

t h e G o v e r n m e n t o f I n d i a t h e variation o f t h e tendered quantities u n d e r t h e variation
clause i n t h e contract has been restricted to 1 0 % b e y o n d w h i c h t h e contractor w a s
entitled to c l a i m as extra. These awards have been accepted and i m p l e m e n t e d b y t h e
G o v e r n m e n t . After these awards t h e contract has been amended a n d t h e l i m i t o f
variation o f t h e various i t e m has been specified, a n d i n s o m e i t e m s p u t a t 1 0 % . T h e
next question i n t h e a b o v e case w h i c h , naturally w i l l arise as to t h e rate payable to t h e
contractor b e y o n d t h e reasonable percentage. T h e r e i s n o reason w h y t h e contractor
should not be entitled to claim for the quantities i n excess of 1 0 % at the prevailing
m a r k e t rates.

" I f i t i s t h e k i n d o f additional w o r k contemplated b y t h e contract, h e , i . e . t h e

contractor m u s t b e paid f o r i t and w i l l b e p a i d f o r i t according' to t h e price
regulated b y t h e contract. I f t h e additional o r varied w o r k i s so peculiar, so
unexpected a n d s o d i f f e r e n t f r o m w h a t a n y person reckoned o r calculated u p o n ,
i t may not be within the contract at all, and he could either refuse to go on or
c l a i m to b e paid u p o n a q u a n t u m m e r i t . "

A contractor w o u l d b e b o u n d b y t h e contract f o r w h a t h e offered a n d w h i c h was

accepted i n c l u d i n g f o r t h e additional w o r k i f agreed. A rate agreed b y t h e contract
w o u l d b i n d h i m i n c l u d i n g f o r additional w o r k p r o v i d e d additional w o r k i s w i t h i n
reasonable percentage o f t h e original w o r k . B u t i f h e i s m a d e to undertake additional
w o r k o f t h e m a g n i t u d e as t h e present case b y n o stretch o f i m a g i n a t i o n a t t h e rate o f
t h e original contract w o u l d b e b i n d i n g . I n v i e w o f t h i s , t h e f i n d i n g recorded b y t h e
A r b i t r a t o r t h a t t h e c l a i m a n t i s entitled f o r a rate d i f f e r e n t f r o m t h e rate s u b m i t t e d u n d e r
t h e contract f o r t h i s additional w o r k w h i c h i s m o r e t h a n 1 5 0 to 1 7 0 percent o f t h e
original w o r k c a n n o t b e said to b e perverse o r illegal. I n fact t h e o r d e r i s j u s t a n d
proper.

1 5 . I t is significant to refer the case o f S. Harcharan Singh v. Union of India

( M A N U / S C / 0 2 1 0 / 1 9 9 1 : ( 1 9 9 0 ) 4 SCC 6 4 7 ) i n w h i c h i t w a s h e l d : - -

" T h e appellant w a s awarded a contract f o r constructing approaches to a b r i d g e .

U n d e r t h e agreement t h e appellant w a s required to d o h a r d c u t t i n g to t h e extent
o f 7 , 5 4 , 5 3 0 l e f t . T h e rate f i x e d f o r t h e said w o r k i n t h e contract was Rs. 1 2 9
p e r thousand l e f t p l u s 2 percent. T h e appellant w a s required to p e r f o r m h a r d
r o c k c u t t i n g to t h e e x t e n t o f 1 8 , 1 8 , 7 0 4 left. T h e appellant claimed p a y m e n t a t
t h e rate o f Rs. 2 0 0 p e r thousand left f o r t h e additional w o r k o f hard r o c k
c u t t i n g . H e also claimed certain o t h e r s u m s u n d e r o t h e r heads. T h e Executive
Engineer by his letter recommended the extra rate o f Rs. 200 per thousand left
for work in excess of 20 percent of t h e stipulated quantity and the
Superintending Engineer and Additional Chief Engineer by their letters also
m a d e s i m i l a r recommendations. B u t t h e G o v e r n m e n t refused to p a y a t a rate i n
excess o f t h e rate o f Rs. 1 2 9 p e r thousand left. p l u s 2 percent stipulated u n d e r
t h e agreement. T h e d i s p u t e w a s , therefore, referred to arbitration. U n d e r clause
1 2 o f t h e agreement t h e Engineer-in-charge w a s empowered to m a k e a n y
a d d i t i o n s to t h e original specifications t h a t m a y appear to h i m to b e necessary
o r advisable d u r i n g t h e progress o f t h e w o r k a n d t h e contractor w a s b o u n d to
carry o u t t h e w o r k . "

O n these facts t h e Supreme C o u r t h e l d : - -

 n'mnupulrdfi
"The question has often arisen whether the contractor under the variation
clause i s liable to execute t h e extra o r additional quantities o f t h e tendered
i t e m s a t t h e tendered rates to a n u n l i m i t e d extent. I n s o m e award g i v e n b y t h e
arbitrators i n t h e Central Public W o r k s D e p a r t m e n t o f t h e G o v e r n m e n t o f I n d i a
t h e variation o f t h e tendered quantities u n d e r t h e variation clause i n t h e
contract has been restricted to 10 percent b e y o n d w h i c h t h e contractor w a s
entitled to c l a i m as extras a n d these awards have been accepted a n d
i m p l e m e n t e d b y t h e G o v e r n m e n t . T h e standard f o r m o f contract o f t h e Central
Public W o r k s D e p a r t m e n t has been amended a n d n o w i t specifically p e r m i t s f o r
a l i m i t o f variation called "deviation l i m i t " u p to t h e m a x i m u m o f 2 0 percent
a n d u p to such l i m i t t h e contractor has to carry o u t t h e w o r k a t t h e rates
stipulated i n the contract, and for the work i n excess of that limit at the rates to
b e determined i n accordance w i t h clause 1 2 - A u n d e r w h i c h t h e E n g i n e e r - i n -
charge can revise t h e rates h a v i n g regard to t h e prevailing m a r k e t rates."

1 6 . I t i s f u r t h e r significant t h a t t h e appellant conceded before t h e A r b i t r a t o r o f n o n -

application o f Chapter 13 i n t h i s case. Relevant f i n d i n g o f t h e A r b i t r a t o r i s recorded
hereunder:

" T h e escalation clauses contained i n Chapter 13 o f t h e contract were also

referred, b u t d u r i n g oral submissions o n behalf o f t h e o p p o s i t e party i t w a s
conceded t h a t t h e y a r e n o t relevant a n d I f i n d t h a t these clauses d o n o t b a r t h e
c l a i m a n t f o r asking additional rate f o r t h e additional w o r k i n question. N e x t i t
was u r g e d t h a t t h e A r b i t r a t o r has n o t considered t h e evidence o f t h e appellant
f o r f i x i n g rate b u t o n l y discussion o f t h e evidence o f t h e claimant. T h i s
submission i s also n o t sustainable. A r b i t r a t o r has referred t h e same b e f o r e
recording h i s f i n d i n g after p r o p e r application o f m i n d . I n paragraph 4 2 o f t h e
a w a r d i t i s recorded " t h e o p p o s i t e party (appellant) as i s apparent f r o m t h e
r e p l y dated 1 6 t h September 1 9 8 9 d i d n o t d i s p u t e t h e analysis o f rates b u t o n l y
relied o n certain clauses o f t h e contract to repudiate t h e c l a i m o f t h e claimant."
I t f u r t h e r recorded i n t h e same paragraph " d u r i n g a r g u m e n t a t o n e stage i t w a s
said t h a t analysis o f rates as g i v e n b y t h e c l a i m a n t i s n o t i n d i s p u t e b u t a t a
later stage i t also said that the same has not been proved." The Arbitrator
f u r t h e r f o u n d t h a t t h e rates specified i n t h e c l a i m p e t i t i o n has n o t been disputed
w h i l e r e p l y i n g i n t h e w r i t t e n statement. T h e a r b i t r a t o r f u r t h e r referred to t h e
a f f i d a v i t o f V.B. S o o d , w h i c h has been f i l e d o n behalf o f t h e claimant, w h i c h
stated t h a t A n n e x u r e s - I a n d I I w h i c h i s t h e analysis o f t h e rates claimed b y t h e
appellant annexed to t h e letter dated 2 4 t h A u g u s t , 1 9 8 9 earlier m a d e b y t h e
c l a i m a n t b e f o r e t h e appellant w e r e g o t prepared b y h i m o n t h e basis o f t h e t h e n
actual expenditure incurred i n execution o f t h e w o r k as w e l l as t h e t h e n
prevailing departmental rates a n d t h e said rates a r e t h e m i n i m u m rates f o r t h e
w o r k i n question. Further i n paragraph 4 3 o f t h e A w a r d t h e A r b i t r a t o r has
referred to t h e a f f i d a v i t f i l e d b y S r i . R.P. S i n h a , Executive Engineer, f i l e d o n
behalf o f t h e appellant, w h i c h i s t h e o n l y a f f i d a v i t a n d evidence o f t h e appellant
pertaining to rate, i f any. T h e A r b i t r a t o r recorded t h a t t h e a f f i d a v i t o f Sri S o o d
has n o t been controverted n o r a n y mistake i n t h e analysis o f rate has been
p o i n t e d o u t b y t h i s affidavit. T h u s i t i s clear t h a t t h e A r b i t r a t o r has considered
t h e evidence o f t h e appellant w h i c h w a s t h e o n l y evidence i n t h e f o r m o f
a f f i d a v i t o f Sri R.P. Sinha. Hence, contention to t h e contrary also fails. I t i s n o t
i n d i s p u t e t h a t t h e evidence b y t h e appellant has been o n l y i n t h e f o r m o f
a f f i d a v i t b y t h e said Executive Engineer. For these reasons even t h e rate
awarded b y t h e A r b i t r a t o r as claimed b y t h e c l a i m a n t f o r t h e additional w o r k i s
also p r o p e r and j u s t a n d w e f i n d n o i l l e g a l i t y i n t h e same."
 fl'mflnupulrdfl
For t h e aforesaid reasons, w e d o n o t f i n d a n y e r r o r i n t h e j u d g m e n t a n d decree passed
b y t h e Trial C o u r t i n m a k i n g t h e a w a r d r u l e o f C o u r t . A l l t h e g r o u n d s raised b y t h e
appellant fall.

I n t h e result, t h i s appeal i s dismissed w i t h costs.

© Manupatra Information Solutions Pvt. Ltd.